Financing Write for Us
Definition :
Financing is the action and effect of financing (contributing money for a company or project, defraying a work or activity). Financing consists of providing capital and resources for the acquisition of goods or services. It is common for financing to be channeled through credits or loans (whoever receives the money must return it in the future).
For example: “Unfortunately, we depend on financing to open a new store on the coast,” “Thanks to the financing from Banco de Crédito, we have been able to acquire new machinery and improve our production,” “I have an interesting project to manufacture shirts to low cost, but I need financing to be able to carry it out.”
Description :
According to the maturity period, it is possible to distinguish two types of financing: short-term (when the maximum time to make the return of the money is less than one year); long-term (there is more than one year to return the money, or there is no such obligation, as when financing is made with own funds). Let’s see some examples: “We are studying various short-term financing alternatives since we do not want to go into debt for long periods,” “The businessman intends to install a new industrial plant in the city, but for that, he requires a long-term financing plan.”
Another financing classification can be made taking into account the origin of the resources. External financing comes from investors who do not belong to the company (bank financing, bond issues, etc.). In contrast, domestic funding originates funds produced by itself through its activity.
It is crucial to accept in mind that the type of financing to choose for a given project depends on various factors, such as the urgency to carry it out, the demands of the source, the time in which it is estimated that it will be possible to return the money, and the volume of resources necessary for the start-up. Today there are many options, some of which are listed below:
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